Biden sets out oil, gas leasing reform, hikes drill cost for cos
The Biden administration has recommended an overhaul of the nation’s oil and gas leasing program to limit areas available for energy development and raise costs for oil and gas companies to drill on public land and water.
The long-awaited report by the Interior Department stops short of recommending an end to oil and gas leasing on public lands, as many environmental groups have urged.
But officials said the report would lead to a more responsible leasing process that provides a better return to US taxpayers.
“Our nation faces a profound climate crisis that is impacting every American?” Interior Secretary Deb Haaland said in a statement on Friday, adding that the new report’s recommendations will mitigate worsening climate change impacts “while staying steadfast in the pursuit of environmental justice?”
The new report seeks a middle ground that would continue the multibillion-dollar leasing program while reforming it to end what many officials consider overly favourable terms for the industry. The report recommends hiking federal royalty rates for oil and gas drilling, which have not been raised for 100 years. The federal rate of 12.5 per cent that developers must pay to drill on public lands is significantly lower than many states and private landowners charge for drilling leases on state or private lands.
The report also said the government should consider raising bond payments that energy companies must set aside for future clean-up before they drill new wells. Bond rates have not been increased in decades, the report said.